Guggenheim analyst Steven Forbes trimmed estimates on Neutral-rated Bed Bath & Beyond (NASDAQ: BBBY) after Q2 results fell short. Interestingly, the analyst feels the company may need a large strategic acquisition within the furniture market to drive both diversification and differentiation.

Forbes commented, "Although we are encouraged by the company's willingness to make strategic investments to drive diversification (i.e., One Kings Lane) and differentiation (i.e., exclusive product launches), we also believe that time is of the essence as consumer expectations and consumer behaviors are adapting rapidly. As a result, we view a large strategic acquisition within the furniture market, as one of the most efficient ways to drive both diversification & differentiation given the company's solid balance sheet and its ability to generate significant FCF."

In conjunction with lower top-line expectations, the firm is reducing 2016 and 2017 EPS forecasts. FY 2016 EPS goes from $4.83 to $4.65 and FY 217 EPS goes from $4.93 to $4.69.

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